Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
Bob Carey
Chief Market Strategist
Click for Bio

Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 

  Health Care Stock Returns Have Outpaced Rising Health Expenditures
Posted Under: Conceptual Investing

 
View from the Observation Deck  
  1. Today's blog post is another attempt to show that investors have a potential long-term remedy for mitigating rising health care costs – owning health care stocks.
  2. As indicated in the chart, from 2007 through 2016, the annual percentage rise in U.S. health expenditures ranged from 2.9% (2013) to 6.5% (2007). There were no years in which costs fell.  
  3. Over that same period, the S&P 500 Health Care Index posted a cumulative total return of 149.68%, or an average annual return of 9.57%, according to Bloomberg. This period included a 22.8% decline in 2008 and 2.7% decline in 2016.
  4. In 2016 (most recent year for data), U.S. health care spending rose 4.3% to $3.34 trillion, according to the Centers for Medicare & Medicaid Services. 
  5. Out-of-pocket health care costs for consumers rose 3.9% in 2016, the fastest growth rate since 2007, according to The Washington Post. It also points out that 29% of people who were getting insurance through their employer in 2016 were enrolled in high-deductible plans, up from 20% in 2014. Deductibles rose by 12% in 2016, compared to just a 7% hike in 2014.
  6. Rising health care costs is an ongoing problem in need of some long-term solutions. Perhaps one of them might be to invest in the very companies that are raising said prices.  
This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. There can be no assurance that any of the projections cited will occur. The S&P 500 Health Care Index is a capitalization-weighted index comprised of S&P 500 constituents operating in the health care sector. 

Download a PDF of this post, please click here.
Posted on Thursday, September 20, 2018 @ 11:34 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
MARKET ANALYSIS
Market Commentary and Analysis
Weekly Video
Weekly Market Commentary
Weekly Market Watch
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email
 


 PREVIOUS POSTS
Trump Rally (11/8/16-9/14/18) vs. Trump Tariffs (3/8/18-9/14/18)
Optimism at a 20-Year High
US Stock Markets Ended September 14, 2018
US Economy and Credit Markets Ended September 14, 2018
A Snapshot of Moving Averages
A Snapshot of Bond Valuations
Historical Perspective on the Yield Curve
US Stock Markets Ended September 7, 2018
US Economy and Credit Markets Ended September 7, 2018
Sector Performance Via Market Capitalization (Year-to-Date)
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2019 All rights reserved.